Business and the Business Environment: TESCO and NHS Analysis

This report delves into the intricacies of the business environment, offering a comprehensive analysis of various organizational types, including private, public, and voluntary sectors, with a specific focus on TESCO and NHS. The report begins by explaining the different types, sizes, and scopes of organizations, providing detailed examples and insights into their structures and operations. It then explores the interrelationships of different functions within an organization and how these functions are linked to the overall organizational structure. The report also presents a detailed examination of the impacts of both macro and micro factors on business objectives and decision-making, utilizing PESTLE analysis to assess external influences. Furthermore, it applies SWOT analysis to evaluate internal strengths and weaknesses in relation to external factors and decision-making processes. The analysis includes the voluntary sector and Oxfam. Finally, the report demonstrates the interrelationship of the various functions within an organization and how they link to organizational structure.

Business and the
Business Environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
Part 1- Essay ...................................................................................................................................3
Explain the different types, size and scope of organisations..................................................3
Demonstrate the interrelationship of the various functions within an organisation and how
they link to organisational structure.......................................................................................6
Part 2- Report...................................................................................................................................9
INTRODUCTION...........................................................................................................................9
The impacts that both macro and micro factors have upon business objectives and decision-
making by appropriately applying a PESTLE analysis..........................................................9
Apply appropriately SWOT analysis and justify how they influence decision-making......12
Explain how strengths and weaknesses interrelate with macro factors................................13
CONCLUSION..............................................................................................................................14
REFRENCES.................................................................................................................................16
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INTRODUCTION
Business environment is considered as collection of different internal as well as external
factors related to an organisation such as customer need and demand, management, owner,
clients, government activities, social trends, supply and demand, employees, market trends,
change in economy and many more (Amankwah-Amoah and Wang, 2019). Organisation
selected for this report is TESCO which is public limited company operating in retail industry. It
is founded by Jack Cohen in year 1919. Respective company operate their business operation
and functions at global level. Topics included in this report are explanation of scope, size, legal
structure, purpose, types, vision and other factors of private, public and voluntary sector as well
as it include relationship among the different organisational function.
Part 1- Essay
Explain the different types, size and scope of organisations
An individual can established their business unit in three types i.e. private, public and
voluntary sectors. Private sector is considered as those business unit which is a part of country
economic system which run by an individual or companies, instead of government bodies.
Generally private sector companies are operating with intentions of earning profit. Example of
private sector is TESCO. TESCO is private limited company which is conducting their business
at retail sector (Aydiner and et. al., 2019). It is founded by Jack Cohen in they year 1919. Its
head office is located at Welwyn Garden City, England, United Kingdom and they operate at the
multinational level such as United Kingdom, India, Thailand, Republic, Poland, Malaysia and so
on. Respective company offer their products through supermarkets, super stores, hypermarket
and convenience shop. TESCO offer their products and services through several divisions such
as groceries, Tesco Clubcard, Tesco Bank, Clothing, Tesco magazine, Tesco mobile and many
more.
TESCO vision is to become most high value retail business brand who serve high quality
products to their loyal and potential customers as well as their mission is to develop value for
customers in order to earn lifetime loyalty from potential customers. Moreover there are different
types of Private sector such as Sole Proprietorship which refers to those companies which are
operate by an individual and in this risk as well as profit are share by owner itself (Belas and
Rozsa, 2019). This mode of private sector is simplest and oldest form that are generally used
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today. In respective type of business there are minimum restriction as well as it can be dissolve
easily. Such as Carpenter, Local Grocery store, Tailor and so on. Another types is Partnership
which is considered as agreement among the two or more people who conduct business
operations together as well as shares profitability and liabilities. Generally in partnership
companies members share both liabilities as well as profit. This is normally agreement is based
on shares, authorised capital, ownership and many other factors.
Third type is Joint Stock Companies those venture have limited financial resources as
well as this business include heavy load of risk while forming business. In this capital can be
upraised by selling shares of different values. In this business managing bodies of company are
Board of Director, CEO, Shareholders and many others. Along with this purpose of TESCO is
to become biggest retail brand by serving quality products and services to customers to make
their every day better. The legal structure of TESCO is corporate governance, in which company
deal along with shareholders (Tesco Legal Structure, 2020). Moreover in this respective
company want to attain that strategy which their shareholders want to attain.
Furthermore, Public sector is also known as state sector which is considered as part of
economy composed by public sector as well as public sector enterprise. There are several
industries which are include in public sector such as school, electricity, emergency service, fire
services, gas, healthcare and many more. Example of public sector enterprise is NHS (National
Health Service). NHS is publicly funded healthcare system established at United Kingdom. It is
developed with four separate systems i.e. NHS England, NHS Wales, Health and Social Care in
Northern Ireland and NHS Scotland (Bratianu, Hadad and Bejinaru, 2020). It is considered as
one of the largest single payer healthcare system around the world. It is founded in 1948 by
Aneurin Bevan. National Health Service offer wide range of products and services related to
medicine and test as well as they offer their products and services at reasonable cost.
National Health Service's Vision is based on three factors i.e. to develop and promote
better care, better health as well as better value as well as their mission is to provide quality
health care services to society so that they can leave their life happily and disease free. There are
different types of Public sector, first is Departmental Undertakings which is one of the oldest
type of public enterprise that is also a part of governance department. These firm didn't have any
apart existence from government bodies for example railways, telephone service, broadcasting
and so on. Second type is Public Corporation/ Statutory Corporation which is a companies are
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generally formed under specific legalisation developed by parliaments, state or central
government. Such as State back, Airlines and so on. Next type is Government Company which is
partly or 51 percent of paid up capital are belongs to central or state governance of nation
(Charter, 2017). Along with this, at respective company all activities are performed under
guidance of government in order to get effective outcome.
The purpose of NHS is based on the four aspects i.e. developing enthusiasm for
scholarship, challenging desire for rendition services, creating character for secondary school
students and promoting leadership among peoples. Along with this, National Health Service's
legal structure is public corporates because it is developed by rules and regulation of parliaments.
Along with this, NHS operates at the international level due to which they adopt different legal
structure according to the location or nation.
Voluntary sector is also known as Civil sector whose duty is to conduct social practices
in order to resolve issues of people. It is generally non government as well as non profitable firm.
These firm earn funding from private sector companies, National lottery, other section of
voluntary sector and from investment (Cross and Miller, 2020). Example of voluntary sector
enterprise is Oxfam. Oxfam is introduced by Cecil Jackson Cole in year 1942 at Oxford,
England, United Kingdom. Its head office is located at Nairobi, Kenya and they offer their
services at the worldwide level. Respective company focus on several aspects such as poverty
eradication, disaster relief, pro migration, advocacy and policy research. Products and services
offer by Oxfam are related to providing financial support to poor, help to disaster sufferer,
provide counselling to clients, help in developing policies and many more.
The main vision of Oxfam is to minimise or remove poverty from world so that every
person leave their life properly. Along with this they want to make world where every individual
treat each other equally. Moreover, mission of respective company is to develop effective
solution for injuries, disease and poverty so that they can change the world and make it effective
(Gaganis, Pasiouras and Voulgari, 2019). there are different types of voluntary sector, fist is
Unincorporated Association which is considered as business unit which is developed by
considering group of people who come together for some specific reason other then profit. They
didn't need any types of cost in order to get set up at the marketplace. Another is Trust which is a
types of organisation considered as three party fiducial relationship at which first party is trustor,
second party is for benefits for the third part i.e. beneficiary. It is generally developed when an
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individual (Settlor) gives property to some other individual (Trustee) (Gölgeci, Karakas and
Tatoglu, 2019).
The purpose of respective company is to help other or society in order to offer them long
lasting solution of injustice in respect of poverty. Along with this, they also want to change the
world and make it better for every person. Moreover, Oxfam's legal structure is unincorporated
which is setup along by considering agreement with peoples. They generally conduct their
business operations and functions for society instead of making profits.
TESCO is private company which is large in size which have more than 4,60,000
employees at the worldwide location. Respective company have number of subsidiaries such as
Ireland, Stores Ltd, Bank and so on (Gregory, Ngo and Karavdic, 2019). TESCO activities are
considered as fundamental element of practices. The scope of company is to extend their
business at the global level in order to earn more and more profitability. For this they need to
conduct market analysis which help in identifying whether to expand business effectively.
In respect of public company like NHS, the size of NHS is huge as they are operating in
numbers of countries in order to provide healthcare services to society. Along with this they also
provide free medical services to the residents of United Kingdom. Moreover, the NHS scope is
to offer media services to more than 64.6 million citizen at the United Kingdom as well as 54.3
million at England. Along with this respective company deal with 1 million patients per 36
hours which include several services. Such as treatments, routine screening, emergency case and
so on (Hillary, 2017).
Voluntary Organisation example is Oxfam, the Oxfam size is middle to large as they are
offering social services at the United Kingdom in order to minimise or remove poverty, help
disaster faced people and so on. Moreover there are 20 independent voluntary companies are
working in order to make nation free from poverty. The scope of respective company is that they
expand their services around the world. This is so because through that they able to make world a
better place to leave.
Demonstrate the interrelationship of the various functions within an organisation and how they
link to organisational structure
Organisation include different departments those who conduct their functioning towards a
common organisational objective. In order to ensure effective growth it is essential for entity to
make sure that there is formative set of coordination in every department (Heirati and Siahtiri,
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2019). As this stimulate entity to gain prosperous growth opportunities along with increased
profitability ratio. In this TESCO is required to ensure that there is formative set relationship in
every department of organisational work structure as to effectively fulfil company vision,
mission and objectives in a best effective manner. Interrelationship between different
departments of TESCO are like Finance with human resource department- TESCO human
resource department efficiently conduct their functions. In order to stimulate high growth for
company this department operate their functioning with finance department. This has been
identified that HR department of entity provide skilled, potential and knowledgable candidates to
finance department. This ensure effective functioning of finance department (Kwilinski and et.
al., 2019). While on the other hand as to operate functioning of HR department like training,
seminars and recruitment, finance department offer adequate finance as to duly fulfil
organisational objectives.
Moreover, Marketing with finance department:- Finance and marketing department are
consider as an essential departmental unit with TESCO. Thus, it becomes important for company
to ensure that both of these department have formative coordination. This ensure organisational
profitability and productivity in a well defined manner. Marketing department provide finance
department with increase organisational sales that simultaneously increase entity fund reserves.
While on the other hand finance department offer effective funds to marketing unit in order to
conduct marketing activities like advertising and promotion in a well defined manner. This
ensure high growth and profitability for TESCO.
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Illustration 1: Organisational Structure
(Source: Organisational Structure, 2019)
In addition to this another comparison is among Human resource with sales department:-
Both human resource and sale department of TESCO have interrelation that allow them to
conduct their operating with effective coordination. Due to increase in competition it is essential
for company to have skilled staff those who can effectively result to increase overall sales of
organisation (Lu, Wang and Xu, 2019). This will lead entity to gain more competitive
advancements in marketplace. In addition to this, it has been identified that HR manager of
TESCO provide effective as well as skilled candidates those who contribute towards high sales
of organisation. While sales department provide effective communication and balance between
employees in sales department through which HR can effectively able to manage human
resource in well effective manner. This helps organisation to stimulate their profitability in best
effective manner.
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Part 2- Report
INTRODUCTION
For every company it is essential to conduct analysis of business environment so that they
can conduct develop strategies properly according to the factors. This will help them in
understanding opportunities and identifying risk which arise due to business environment factors
(McDonald and Eisenhardt, 2019). Organisation selected for this report is TESCO whose head
office is located at England, United Kingdom. Respective report will also include analysis of
business environment through different models i.e. PESTEL and SWOT.
The impacts that both macro and micro factors have upon business objectives and decision-
making by appropriately applying a PESTLE analysis.
PESTLE analysis is a framework which is used by company to track activities of market.
This tool is mostly used to analyse the external factors which are affecting the business
organisation. Such analysis is useful when opening a new business and entering into UK market.
The positive and negative impact of PESTLE analysis on TESCO which is given below:
Political Factor: Political factors are those which includes rules,restrictions,laws etc. These
factors are important for each and every organisation to be stabilised in the market. TESCO has
broad market all over the world so it should maintain its relations with the government (Quinlan
and et. al., 2019). Over the years ago,when UK government increases tax rate to overcome the
financial crisis all over the country, it affected TESCO sales revenue. Due to high taxes, gross
and sales revenue of company was fluctuated.
Positive Impact: Due to changes in political law, it increase price of product thus
accelerating revenue of company.
Negative impact:Due to Brexit,TESCO reduces its sales and profit which imposes
negative impact on the company.
Economic Factor: Further comes economic factor, these factor are most crucial part of the
framework. These comprises of deflation and inflation rates, unemployment etc. Tesco should
have been more careful while dealing with such factors.
Positive Impact:When the tax rates were high, country's economy was uprising. The
purchasing power of customers was increasing , which was beneficial for company.
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Negative Impact:Due to decrease in income of individuals , TESCO has reduced their
sales and profit.
Social Factor:These factors includes demographic,age,income,regions etc. TESCO is the
biggest retailer in the market so it target people with disposable income who can easily buy the
product (Richards and et. al., 2019).
Positive Impact:TESCO provides wide range of variety of products used by everyone
from toddlers to old age people thus it increases sales of the company.
Negative Impact:Due to increase in unemployment rate, TESCO has reduces its profit .
Technological Factor: Technology is important because it simplify the work , reduces
manpower and resources and has affected organisation production capacity and cost efficiency.
But TESCO should improve its technology at advancement level because market is changing at
every phase .
Positive Impact: TESCO has boost up its business online such as groceries thus it
triggered sales revenue of company
Negative Impact:The cost of implementation of advanced technology is very high it
added cost to the product.
Legal factor:Last but not the least; legal factor which include, employment law, antitrust law,
money laundering etc. TESCO selling its product and providing financial services all over the
market , more legally it has been engaged.
Positive Impact:The positive impact of following legal policy and procedure is it
increases brand image or goodwill of company.
Negative Impact:Due to changes in legal procedure results in alteration of companies
policies imposed negative impact on the company.
Environmental Factor:The rules and regulations followed by TESCO with the purpose of
protecting environment which is given below.
Positive Impact:The rules and regulations followed by company that helps in protecting
environment (Roetzel, 2019).
Negative Impact:Due to Environment enactment law, it imposes penalty on companies
which eroded brand image or goodwill of company.
PESTLE OF Aldi
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Political Factor: Political factor involves taxation policy, rules, laws, regulations,
legislation and many more. All these factor affect positively and negatively on the working of
company. In context of Aldi, if there is a change in the taxation policy it affect sales of the
business organisation. Due to change in law imposes direct impact on whole activities of Aldi for
implement their task in ethical manner.
Positive impact: Due to political stability of Batavia, Illinois thus it affect positively on
whole productivity and profitability of Aldi.
Negative impact: A high level of taxation policy affect the sale of company in negative
manner.
Economic factor: Economic factors includes inflation as well as deflation rate which
affect the sales of the business organisation. In reference of Aldi, the economic position of
Batavia, Illinois is strong that will generate revenue for company for achieving competitive
advantage in the marketplace.
Positive impact: It provides employment opportunities to individual that assists in
enhancing the living standard.
Negative Impact: Due to increase in wage rate affect the sales and productivity of the
business organisation.
Social factor: It involves income, age and regions that imposes direct impact on
profitability of the company (Soppelsa, Lozano Gracia and Xu, 2019). The manager of Aldi
focuses on satisfying the need and requirement of consumer in effective manner.
Positive impact: It helps in satisfying the need and requirement of consumer that assists
company in building reputation of company.
Negative impact: Herein, sometime business organisation adopt CSR policy that affect
the sales of organisation in adverse manner.
Technological : These are those factors which are related to change in technology of business
environment these are change in production methods, etc. change in technology used by Aldi and
other super markets is continuously changing.
Positive impact : positive impact of these factor on Aldi is it help it in using innovative
ways in there working.
Negative impact : It have also impacted negatively on Aldi by increasing their cost
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Environmental : these are the natural factors which impact on organtion the imapct of this
factor are stated below
Positive impact : It have great positive impact on firm as it help it in mainlining
goodwill in market
Negative impact : Aldi is also facing negative impact of this as it will deceases there
profit because of various environment laws.
Legal : This factor include laws and regulation of government of area where Aldi is working
Positive impact: Aldi have positive impact of this as it will help them in making rules
and regulations
Negative impact : Brings rigidity in working structure of Aldi
Apply appropriately SWOT analysis and justify how they influence decision-making.
In order to conduct analysis of internal and external environment, TESCO can conduct
SWOT analysis which is given below:-
SWOT Analysis of TESCO
Strengths Weaknesses
 Respective company is one of the
biggest grocery retail store at the
United Kingdom market as well as they
are also have leading market shares.
 TESCO covers wide range or location
at geographical level such as it present
in approximately 14 countries with
more than 6800 store (Rofiq and
Pramono, 2019).
 Respective company get failed in
operating at some market like United
State as well as Japan.
 TESCO adopt low cost strategy which
impact on their profitability ratio at the
potential market at worldwide level.
Opportunities Threats
 TESCO can expand their business
through Jack business store. This is so
because that will help them in growing
business by competing low cost
 Respective company is operating their
business at worldwide level due to
which they are facing huge
competition. Such as ALDI, LIDL,
Sainsbury's and so on (TESCO SWOT
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competitors such as Aldi and Lidl.
 Respective company can grow their
business by increasing business through
online shopping options as well as
home delivery services.
Analysis 2019 | SWOT analysis of
TESCO, 2019).
SWOT Analysis of ALDI
Strengths Weaknesses
 Aldi is discounted store chain which
offer their products at low price that
attract huge customers (Sleapwood,
2019).
 Respective store provide great saving
opportunities for customers which
make them loyal and retain for long
term.
 Respective store required high
productivity employees in order to
survive in market. Due to which they
need t conduct multiple shift but they
didn't get pay accordingly.
Opportunities Threats
 Aldi company can expand their
business operations and functions at the
other international locations.
 Respective company may faced huge
competition which is threat for them
such as TESCO, Walmart, Best Buy
and so on.
Explain how strengths and weaknesses interrelate with macro factors.
Political Factors- Respective factor will include elements like tax rate, government policy,
interest rate and so on. Strength- At United Kingdom, political condition is stable which is consider as strength
because through it TESCO can expand their business at respective location.
 Weaknesses- Due to change in political condition and law cost of import as well as
export get fluctuate which is weaknesses for respective company operations.
Economic Factors- This factor will include elements like exchange rate, unemployment rate,
income tax and so on.
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 Strength- Respective company offer all price range of products which help them in
attract each income group people which is strength for them.
 Weaknesses- At United Kingdom sometime inflation arise which is weakness for the
respective retail company as it impact on their sales (Sebikari, 2019).
Social Factors- Factors included in social factor is age, demography, gender and so on. Strength- TESCO conduct market analysis on continuous basis which is strength for
them because it help them in developing products according to customers.
 Weaknesses- Taste and preference of customers change on continuous basis which is
weaknesses for respective company because they need to develop new strategies and plan
accordingly.
Technological Factors- Respective factors include elements like research and development,
technological change and many more. Strength- Through implementation of new technology, TESCO can increase their
productivity which is strength for them.
 Weaknesses- Implementation of each and every new advance technology impact on
respective company budget which is weakness.
Environmental Factors- This will include factors like climate change, weather, rules and
regulation for environment and so on. Strength- TESCO follow each and every rules and regulation which are developed by
UK government which is strength for them (Shukla and Pattnaik, 2019).
 Weaknesses- Implementation of eco friendly material in procedure is expensive for
company which is their weakness as they need to manager their budget.
Legal Factors- Respective factor include elements like health, safety, protection, discrimination
law. Strength- Respective company follow all legal practices developed by government of UK
which help them in conducting work effectively and legally.
 Weaknesses- But at some situation respective company not able to follow all rules and
regulation which are developed by government bodies.
CONCLUSION
By analysing above discussed point it can be summarise that, a company can be operate
at the three level i.e. private, public and voluntary. The business types is generally decided by an
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individual who want to established a unit. Different types of business have different scope, size,
purpose, types and so on. Along with this, it is essential for a company management to conduct
evaluation of market in both internal as well as external manner because that will help them in
developing effective decision and attaining goal. For which management can adopt different
models such as for internal they can adopt SWOT as well as for external evaluation they
implement PESTEL analysis. Through this firm able to get better as well as effective outcome.
15

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